Tech earnings this week will offer investors a window into AI boom

It’s another season of big tech earnings: Tesla, Microsoft, Meta and Apple report fourth quarter results this week. These firms are part of the Magnificent Seven, a group that outperformed markets in 2025, but have had a mixed showing so far in 2026.

Earnings calls are always about returns. But Ronnie Sadka, a finance professor at Boston College, said investors are increasingly taking a more scrutinized look at the Magnificent Seven because of the hundreds of billions of dollars the companies are spending on artificial intelligence.

“Is it justified? So is it overinvesting? Are they going to see some real cash?” he said.

Companies need to move beyond hype and prove their worth. That’s maybe easier for firms that make chips or sell cloud infrastructure. But Shay Baloor, chief market strategist at Futurum Equities, said for companies like Meta and Apple, the company in some ways has to “justify their AI investment by making its own products more engaging.”

Can they grow beyond social media and iPhones and build valuable AI features into their products?

Investors might have to wait a bit longer for answers. Because despite all the talk about an AI bubble, Dan Ives, head of tech research at Wedbush, said the industry is in its early stages.

“This is still, what I view, the third inning of a nine-inning game of an AI buildout. I think investors are underestimating the scale and scope,” he said.

The Magnificent Seven — and Nvidia, which reports its fourth quarter earnings next month — are bellwethers for the AI boom.

“So they are the gas in the market. But as it all plays out the tech trade is spreading to other sectors,” Ives said.

Investments in AI will keep growing as industries like finance and health care create their own products and adopt more of the technology, he said.